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AMENDED CODES OF GOOD PRACTICE

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CONSTITUTIONAL MANDATE FOR B-BBEE

Section 9 of the Bill of Rights

“Equality includes the full and equal

enjoyment of all rights and

freedoms. To promote the

achievement of equality, legislative

and other measures designed to

protect or advance persons or

categories of persons

disadvantaged by unfair

discrimination maybe taken”

B-BBEE IMPLEMENTATION

FRAMEWORK

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Broad-Based BEEStrategy 2003( Strategic Framework)

Broad-B

ased BEE

Act No. 5

3 of 2

003

Codes of GoodPractice 2007

B-BBEE CommissionReport 1998

Revised

B-BBEE

Codes 2012

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“Economic Transformation will take centre stage during the new term of government as

we put the economy on an inclusive growth path. As the National Development

Plan outlines the structure of the economy will be transformed through

industrialization, broad based black economic empowerment and through

strengthening and expanding the role of the state in the economy.” President Zuma

address, Inauguration as fifth President of RSA

USHERING IN A NEW ERA OF EMPOWERMENT

USHERING IN A NEW ERA OF EMPOWERMENT

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B-BBEE

NGP

Initiative

NDP

NIPF

IPAP

CSDP

NIPP

Skills D

evelopment

DEVELOPMENTAL OBJECTIVES

Job creation

Localisation

Industrialisation

Supplier D

evelopment

Good Governance Economic Growth and Development Operational

Excellence

Competitiveness

Inclusive Growth Productivity &Industralisation

RE-ORIENTATION OF B-BBEE

MATERIAL AMENDMENTS OF THE B-BBEE ACT

• Aligning the Act and the codes• Introduction of a trumping clause• Creating the B-BBEE Commission• Specifying requirements re: monitoring, evaluation and reporting• Introducing offences penalties & prohibitions for fronting• Introducing the concept of “B-BBEE verification Regulator and

professionals”• Clarifying & extending the Minister’s power to make regulations• Status of Sector Codes• Specify qualification criteria for procurement and other economic activities

for organs of state or public entities

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Key Principles Description Implication

Priority Element

Ownership, Skills Development and Enterprise and Supplier Development have 40 % subminimum

•QSEs to comply with at least two of the priority elements • Ownership is compulsory and either Enterprise and Supplier Dev. or Skills Development;•Large entities to comply with all priority elements • Non-compliance of the thresholds in priority elements, the overall Score will be discounted by one (1) level down

Enhanced Recognition Status (ERS)

Enhanced the recognition status of Black Exempted Micro Enterprises (EME) and Qualifying Small Enterprises (QSE)

• EME to obtain a sworn affidavits• Black Owned QSE only required to obtain a sworn affidavits

CODE 000 : KEY PRINCIPLES

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Key Principles Description Implication

Adjusted Threshold

EME : Annual Total Revenue up to R10 million

QSE: Annual Total Revenue R10 million - R50 million

Large entities: Annual Total Revenue of R50 million and above

Companies that are expected to comply with the generic scorecard represents 2% of all active fillers.

SOURCE: SARS 2012

CODE 000 : KEY PRINCIPLES

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B-BBEE Status Current Qualification New Qualification B-BBEE recognition level

Level One Contributor ≥100 points on the Generic Scorecard ≥100 points on the Generic Scorecard 135%

Level Two Contributor ≥85 but <100 points on the Generic Scorecard

≥95 but <100 points on the Generic Scorecard

125%

Level Three Contributor ≥75 but <85 on the Generic Scorecard ≥90 but <95 on the Generic Scorecard 110%

Level Four Contributor ≥65 but <75 on the Generic Scorecard ≥80 but <90 on the Generic Scorecard 100%

Level Five Contributor ≥55 but <65 on the Generic Scorecard ≥75 but <80 on the Generic Scorecard 80%

Level Six Contributor ≥45 but <55 on the Generic Scorecard ≥70 but <75 on the Generic Scorecard 60%

Level Seven Contributor ≥40 but <45 on the Generic Scorecard ≥55 but <70 on the Generic Scorecard 50%

Level Eight Contributor ≥30 but <40 on the Generic Scorecard ≥40 but <55 on the Generic Scorecard 10%

Non-Compliant Contributor <30 on the Generic Scorecard <40 on the Generic Scorecard 0%

AMENDED B-BBEE RECOGNITION LEVELS

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CODE 000 :AMENDED GENERIC SCORECARD

Element WeightingCompliance

Target

Ownership 25 points 25% + 1 vote

Management control 19 points (50% to 88%)

Skills Development 20 points 6% of payroll

Enterprise and Supplier Development

40 pointsPP = 80%SD = 2% (NPAT)ED = 1% (NPAT)

Socio-Economic Development 5 points 1% (NPAT)

TOTAL 109 points

IMPLICATION FOR THE RF INDUSTRY

The Road Freight Sub-Sector Code was gazetted in August 2009 as one of the nine sub-sector codes of the Transport Sector Code

The Sub-Sector Code is legally binding to private and public sector entities operating in the Road Freight industry

The Road Freight industry should work towards alignment with key amendment principles of the CoGP

The effective date of the Amended Codes and all aligned Sector Codes is May 2015

NEW TRAJECTORY FOR B-BBEE

Change SA culture to be supportive of entrepreneurship and diversification of value chains;

Concerted effort in linking B-BBEE with other government economic development strategies

Strengthen local procurement from B-BBEE compliance suppliers through ensuring value adding manufacturing and enhancing local supplier development programmes.

Focus on businesses and industries that result in significant job creation and addressing socio economic challenges; and

Symbiotic relationship between the public and the private sector and amongst private sector players , and large and small enterprises to unlock opportunities.

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THANK YOU

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QUESTIONS AND DISCUSSION